KPRC 2 Investigates: Fraudsters targeting Texans’ unemployment benefits

HOUSTON – Imagine being laid off and finally receiving notification that your unemployment insurance claim has been approved. For the millions of Texans who have been unemployed due to the pandemic, that approval is great news.

RELATED LINK: Texas unemployment numbers

But what if you didn’t file that claim, and someone else is using your name to commit unemployment insurance fraud and receive your benefits?

That’s exactly what happened to Veronica Smith, of Katy, back in July.

“I was a little shocked when that happened," Smith said. "I got a letter from the unemployment agency saying that I’d filed for unemployment which I had not.”

Smith, who works as a drafter for an engineering company, said she has not filed for unemployment nor been laid off in over 30 years.

“The last time I was unemployed was 1988," Smith said. "That was in the day when you had to drive to the unemployment office, fill out the paperwork … drive around and do your three times a week search … and then fill out the paperwork and then manually mail it in.”

Anatomy of a fraudulent claim

So, just how did this happen? First, filing unemployment is done virtually -- either over the phone -- and that has created an opportunity for fraudsters to take advantage of victims like Smith, by using their identity to file unemployment insurance claims.

James Bernsen is the deputy communications director for the Texas Workforce Commission. In the seven months since the pandemic hit, the agency has processed the equivalent of years' worth of claims.

“In most cases, the way this happens is somebody’s information has been compromised somewhere else," Bernsen said. "There’s another website, or another place where their identity has been stolen … or information has been gained about them, and people will try and put in a claim on their behalf.”

Fighting back

Once Smith received the correspondence from TWC about the claim, she called and even emailed them to let them know the claim was fraudulent. But she wasn’t able to speak with anyone from the agency. Last week, she got another letter from the TWC.

“Just last week, I got a letter from them stating that they received a new address and telephone number for me, and they were changing it in the records, and I did not do that either,” Smith said.

Bernsen did exactly what she is supposed to do, which is report the fraud by calling TWC.

RESOURCES: How to report unemployment insurance fraud | Fraud hotline: (800) 252-3642 | Email:

Bernsen said the agency’s main focus is getting legitimate claims paid, so representatives can’t call back every fraud case reported.

“The resources for callbacks are focused on that population, but there should be no doubt, anytime we get applications of people or people think that a fraudulent application has been put in on their behalf, we definitely investigate those,” Bernsen said.

He said once fraud has been reported, the account is suspended in the TWC system.

Though Smith’s account shows someone tried to file weekly benefits, none were actually paid out.

“As soon as we identify that any fraudulent activity has happened, we verify the identity of the person who’s making the complaint and therefore determine someone else is trying to steal their identity, we shut down that account and no money goes out,” Bernsen said.

Bernsen also said that in the event Smith becomes unemployed in the future, she does not have to worry about the fraudulent claim being held against her.

TWC suggests these steps to protect yourself

  • Contact the Police Department in the city in which you reside and get an incident report and number.
  • Consult the Federal Trade Commission website (checklist of further actions is available on this site).
  • Contact one of the three credit reporting agencies listed below, and:
    • Ask that a free fraud alert be placed on your credit report.
    • Ask for a free credit report.
    • If needed, ask to have your credit account frozen.
      • Equifax - 800-349-9960.
      • Experian - 888-397-3742.
      • TransUnion - 888-909-8872.
  • If a bank or credit union account was compromised, contact the fraud department of each institution. Report the identity theft and, if needed, ask them to close or freeze the compromised account.